MARKET SAVVY

Stocks Hit Wall as Dow Falls 191, Nasdaq Loses 98

Wall Street's latest run to record highs ended abruptly Tuesday as profit-taking hammered leading technology stocks and dragged the broad market lower.

The Nasdaq composite plunged 98.11 points, or 3.5%, to 2,732.18, closing near its low for the day. It was the index's biggest loss since April 19, when it fell 138.43 points.

The Dow Jones industrials tumbled 191.55 points, or 1.7%, to 10,996.13, pulling up from the day's low of 10,969.

Losers swamped winners by more than 2 to 1 on the New York Stock Exchange and on Nasdaq. But NYSE volume was a modest 758 million shares.

Analysts said many stocks' surge to new highs last week in effect priced in the strong second-quarter earnings that the companies now are reporting.

"We've anticipated all of these good earnings already," said Robert Finch, a money manager with Aeltus Investment Management, which oversees $60 billion. "Now we need to have a mega-surprise to have a good jump" in the market.

What's more, some analysts are warning that technology firms' earnings growth, in particular, may slow in the second half.

But some traders said earnings worries are merely a convenient excuse to take profits in stocks that have rocketed this year.

Leading the sell-off on Tuesday were IBM, down $6.38 to $128.25; Microsoft, down $5.06 to $93.31; Texas Instruments, down $8.94 to $141; and Motorola, down $4.13 to $90.50. All had reached all-time highs in recent sessions.

Among other growth stocks, Home Depot slid $4.31 to $65.50 and GE fell $2.44 to $117.56.

The market did have pockets of strength. Paper stocks rose, led by International Paper, up $1.19 to $54.06, on optimism about future earnings growth. And drug giant Johnson & Johnson edged up 50 cents to $96.44 after reporting quarterly earnings up 15%.

Even in the tech sector, some stocks shined. Qualcomm jumped $4.25 to $162.94 on the heels of its earnings report.

Despite caution about some companies' earnings growth in the second half, analysts are still exceedingly optimistic about blue-chip growth overall.

Analysts expect operating earnings for companies in the Standard & Poor's 500 index to grow 21.3% in the third quarter and 21% in the fourth, according to a First Call/Thomson Financial survey.

Among Tuesday's highlights:

* Internet-related stocks were broadly lower, despite strong receptions for some new issues.